Nov. 14 (Bloomberg) -- European stocks rose for a second week after the Group of 20 nations agreed to maintain stimulus efforts and earnings at companies from Credit Agricole SA to Holcim Ltd. beat analysts’ estimates.

BHP Billiton Ltd. and Rio Tinto Group led mining shares higher as China’s industrial production and orders for Japanese machinery increased. Credit Agricole, France’s third-largest bank by market value, and Holcim Ltd., the world’s second- biggest cement maker, gained more than 7 percent. British Airways Plc and Iberia Lineas Aereas de Espana SA advanced at least 7 percent after agreeing to a $7 billion merger.

The Dow Jones Stoxx 600 Index rose 2.8 percent to 247.8 this past week. The Euro Stoxx 50, a measure for the largest companies in the euro zone, climbed 3.2 percent.

“The earnings season has beaten expectations on both profit as well as on the sales side,” said Gregor Mast, an equity strategist at Clariden Leu AG in Zurich, which oversees about $88 billion. “The market is now digesting the news and waiting for confirmation that economic recovery will continue and profits will increase. We can’t exclude that markets may reach new highs at the end of the year.”

The Stoxx 600 has surged 57 percent since March 9 amid signs government stimulus programs and record-low interest rates are helping to drag the economy out of recession. U.K. Chancellor of the Exchequer Alistair Darling, hosting a meeting of finance ministers from G-20 nations, said his colleagues decided to keep interest rates low and maintain record budget deficits until a recovery takes hold.

European Economy

The euro-area economy emerged from its worst recession since World War II in the third quarter as exports from Germany and France helped compensate for households’ reluctance to increase spending. Gross domestic product for the 16 nations using the euro rose 0.4 percent from the second quarter, when it fell 0.2 percent, the European Union’s statistics office said. Economists had forecast 0.5 percent growth, according to the median of 34 estimates in a Bloomberg survey.

National benchmark indexes advanced in all 18 western European markets this week, except Greece and Iceland. The U.K.’s FTSE 100 rose 3 percent and France’s CAC 40 surged 2.7 percent. Germany’s DAX gained 3.6 percent as Allianz SE increased.

BHP Billiton, the world’s biggest mining company, jumped 6.7 percent and Rio Tinto, the third-largest, added 7.4 percent.

The Stoxx 600 Basic Resource Index rallied 5.8 percent, the best performance among 19 industry groups, as copper posted a second weekly gain on the London Metal Exchange.

Chinese Production

Reports this week showed Chinese production climbed the most since March 2008 last month and Japanese machinery orders climbed 10.5 percent in September from a month earlier, more than double the 4.1 percent median forecast of economists in a Bloomberg survey.

Credit Agricole climbed 7.3 percent after reporting a 21 percent drop in third-quarter net income to 289 million euros ($431 million). That still topped the 128 million-euro median estimate of seven analysts surveyed by Bloomberg.

Holcim gained 8.2 percent as the cement maker reported third-quarter net income of 673 million Swiss francs ($665 million), after plant closures and job cuts helped boost margins. The mean estimate of five analysts surveyed by Bloomberg was for a profit of 464.6 million francs.

Per-share profits have topped analysts’ estimates at 165 of the 295 companies in the Stoxx 600 that have announced results since Oct. 7, according to Bloomberg data.

BA, Iberia Merger

British Airways, Europe’s third-largest carrier, advanced 9.2 percent and Iberia rose 7.5 percent after agreeing to a merger following more than a year of talks. Under the all-share deal, BA investors will own 55 percent of the business, which will be led by Willie Walsh, the U.K. carrier’s chief executive.

Takeovers have been increasing as government stimulus measures help to ease credit markets. So far this month, $125 billion of acquisition deals have been announced, compared with $67 billion in the whole of November 2008, according to Bloomberg data.

HSBC Holdings Plc rallied 8.5 percent as Europe’s biggest bank said third-quarter pretax profit was “significantly” higher than the year-earlier period as loan provisions declined.

Allianz, Europe’s largest insurer, jumped 6 percent. Excluding the sale of Dresdner Bank, third-quarter net income more than doubled to 1.32 billion euros from 545 million euros a year earlier as investment income recovered from year-earlier writedowns. That beat the 1.25 billion-euro median estimate of analysts in a Bloomberg survey.

Cookson, Sonova

Cookson Group Plc surged 16 percent. The world’s biggest maker of ceramic linings for metal smelters said it expects trading profit for the full year to be “around the upper end” of analyst estimates.

Sonova Holding AG surged 14 percent. The maker of Phonak hearing aids raised its full-year outlook after reporting a 22 percent increase in first-half income.

IMI Plc soared 14 percent. The world’s largest maker of pneumatic controls said its earnings for 2009 are likely to be “materially ahead of current consensus.”

Genmab A/S plummeted 24 percent, making it the worst performer on the Stoxx 600 this week. Credit Suisse Group AG lowered its recommendation for the Danish biotechnology company to “underperform” from “neutral” because of a reduced peak sales forecast for its Arzerra leukemia treatment. BofA Merrill Lynch Global Research also reduced its share-price estimate for the company to 105 kroner from 148 kroner.

On Nov. 5 Genmab said it will post a 2009 operating loss of $228 million compared with a previous forecast for a $127 million loss.

Volkswagen AG common stock slid 12 percent, and the preferred shares sank 14 percent, the biggest drop in a year. Credit Suisse and Goldman Sachs Group Inc. said they sold 25 million preferred Volkswagen shares that were controlled by Qatar Holding LLC through options contracts.

To contact the reporter on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net.

Last Updated: November 14, 2009 06:01 EST